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MERCEDES-BENZ CHAMPIONSHIP

January 7, 2009

Tim Finchem

KAPALUA, HAWAII

DOUG MILNE: We would like to welcome Commissioner Tim Finchem to the interview room here at the 2009 Mercedes-Benz Championship, first event of the FedExCup Championship.
You mentioned that you were encouraged about the way the PGA TOUR came out in 2008, and as we start the 2009 season, maybe just some comments on how you are feeling in week one here.
COMMISSIONER FINCHEM: A couple comments, and then I'll take your questions. First of all, we are excited about being back at Kapalua to start the season. It's always been a good place to kick things off. We did have a terrific 2008. We were very, very pleased and mildly surprised with the financial performance of the TOUR at our tournaments in 2008, given, certainly, the economy going into the year, the downturn through most of the year and the severe downturn we got into most of the fall. That was very comforting and helped us prepare more for this year and next year. We are also pleased the tournaments were able to generate a new record in charitable giving this past year.
So that said, as we come into 2009, obviously the economy has continued to decelerate. We are going to have more challenges, just like all other businesses and all other sports are going to have. We continue to believe that we are well-positioned to deal with the challenges. If, in fact, this downturn turns out to be, from a cyclical perspective, similar to historic downturns, we should be able to come through it. Our major focus is to position ourselves to be stronger coming out than we were going in. That is our focus.
It's going to be a tough go. A lot of companies are cutting budgets, cutting advertising, cutting sponsorship across the country and around the globe, and it is going to make our work more challenging. But our value is still there. We just have to continue to work hard and hope that we start to come out of it during 2009, or into 2010.
On the competitive side, there are two reasons we are excited. One is that not only do we have Tiger coming back at some point in the year, but we have this great batch of really stellar performances the last few months that we think are going to excite fans as they watch these players play and get ready for Tiger's emergence on the scene.
And then secondly, we do like the reaction we have gotten to the changes to the FedExCup this year. We think we are in a situation now where we have three levels of the FedExCup competition. You have the regular season, which is a little bit more important than last year, because you carry the points. You have the first three events of the Playoffs, which are very important, because they position the players for how they are going to come into Atlanta. Then you have a re-seed going into Atlanta, so it will be very much of a shootout in Atlanta.
We know it's going to be more exciting. We also think that, as a couple of players have suggested since we have announced the changes, this could be one of the toughest things to win in the sport, when you combine all three of those things that you have to excel at for a period of time.
So those are the two fundamental things we are looking at. It could be really a bang-up year competitively. And it would be great if it was, because it will help us with television and help us with sponsorships and ticket sales and create more excitement.
That's our thought process, and with that, I'll just pause and give you an opportunity to ask me anything that might be on your mind.

Q. You indicated that your major focus was to be better coming out of whatever this is we are in right now, than going in. How do you do that?
COMMISSIONER FINCHEM: Well, there's a number of things that go into that. I think the first and foremost is coming out in good shape in the wide range of scrutinies that we always get during these downturns.
When we start into a downturn and companies are reducing their expenditures in advertising and marketing and sponsorship, they are obviously going through a process that they are deciding what's more valuable to them, where they get most value to the dollar spent.
In prior downturns -- and I would add to that, in my experience, every time we have a downturn, there was even more scrutiny than last time, and there's better scrutiny, because companies have learned how to do it better. They have better analytics and outside consultants, etc., etc.
So in prior downturns, we have performed very well in that regard, because our value model, in terms of spending a dollar with the PGA TOUR versus spending a dollar versus X-Sport versus spending a dollar in Y-Sport, we come out very well. The first step is to win that contest and to come out ahead. If we are coming out ahead in those tests and those challenges, that absolutely positions us better for the future.
The second thing is that we just take advantage of the environment to work hard on our cost structure, challenge ourselves, although, we like to think that we do that all the time, but even more intensely, and be more efficient coming out of it.
And the third thing is, use the period to where we are not winning that contest, where we are in a situation where we are sliding, use the opportunity to fix whatever problem it is that created that slide and structurally make changes that give us more value.
So that's where we are at full-court press to do. We are going to take some hits. Everybody is going to take some hits in this environment. But if it's cyclical, we'll come through it and we want to position it to get back into a solid growth pattern.

Q. You mentioned as such that you are going to take some hits. Where is the pain going to show up, if at all, in the TOUR?
COMMISSIONER FINCHEM: Well, it depends on a lot of factors. In the last two downturns, we took hits but we replaced the hits. We came out of those with a better, stronger set of sponsors than we had going in; because we were successful, when we lost a sponsorship, of replacing it with a better company and with a company that was more engaged and a company that wanted to help build things, not just put their name on things. We were 100% sponsored on those downturns, and coming out of it were even stronger.
If you don't replace or make adjustments, we can see some impact at the tournament level. We could see some impact in our television structure. But it's way too early to assume any of that, because, knock-on-wood, we continue to move along reasonably well. But if the economy is going to continue to worsen, and we have a lot of sponsorship up for renewal, it's hard to manage in that we are not going to have some turnover in some fashion.
Really, to answer your question, it has a lot to do with how that's handled. There's a lot of variables to that.

Q. Is charity a potential place where that could have an impact?
COMMISSIONER FINCHEM: It could. We were moving right along in moving our charitable numbers up for a good number of years, and we monitor it very carefully. It's very important to us that we are doing whatever we can, because now it's not just something we do; it's part of our mission.
So here again, this is a way to challenge ourselves on how we can use -- if you think of the PGA TOUR as a charitable platform, something that's designed to generate charitable giving, which is basically what we have done in the last ten years.
We have changed it from a situation where we had some tournaments that raised money for charity to where the platform is really designed to stimulate charitable giving; if you think of this that way, then the question is, if we are going to have a couple of bumps in the road in that area, then we want to make sure that we are doing what we can do to improve the strength of that platform.
We are working on some things in that regard, and we'll have more to say about that in a few weeks.

Q. Would you ever consider trading out prize money for directing it just towards the charity?
COMMISSIONER FINCHEM: Well, I wouldn't rule out anything, but speculating on how we are going to deal with any given situation makes no sense at this point.

Q. This question deals with the media. Obviously sports, particularly in America, are based on television rights, and that's where the money comes from. As long as there's an audience and as long as the networks or whoever are going to the games and the events and the tournaments, you're fine. But from our standpoint, print journalism, newspapers are collapsing all over the place and some of us have lost jobs. I just wonder, is there a worry that tournaments will not be covered the way they were; certainly I'll mention Doug Ferguson that we all know, and who does a fantastic job, but everything will be covered by AP. Is there a conscious thought of this on the TOUR?
COMMISSIONER FINCHEM: I would hate to see a situation develop where we were relying on a guy to cover the sport for AP who would rather go out and play golf than come to the Commissioner's press conference ... (laughter).

Q. He's trying to get a jump on you for the AT&T.
COMMISSIONER FINCHEM: I worry about that (laughter).
Well, the thing about it is that -- I don't really know how to answer that question. It's hard to look into a crystal ball and say: What's the world like with everybody getting their news in snippets on the Internet or some of these news shows on cable TV, and that's the only place to get information and they don't pick up the newspaper anymore.

Q. Hometown papers have to cover their teams, but it seems that golf, tennis, and auto racing, particularly, on paper, doesn't feel like, Hey, we don't have to send a guy to this tournament or this race, but we have to cover the Orlando Magic or the Tampa Bay Buccaneers.
COMMISSIONER FINCHEM: They do, and because the community or the market -- we have golf tournaments. Let's say we have a PGA TOUR event in St. Louis this year, we're there once during the year for four days of competition. The market doesn't view it -- the intensity level of the fans isn't such that they really have to have somebody that covers that sport for them.
So when you are coming to chopping budgets, a dedicated golf writer is going to come on the chopping block before somebody that covers a team sport. That's just the way it is.
I went out to my driveway and picked up my local newspaper and thought I had lost a few sections of it. It got quite thin on some days. But I don't know where it leads.
To be able to live in Pittsburgh or Detroit or anywhere and see a familiar name dedicated to your newspaper writing about a sport is a good thing for our sport. Losing that is a bad thing for our sport. But I can't quantify it in terms of what it really means to the fan base.

Q. In the last few weeks, there was the video message to the players. Do you get a good feeling that the players do get it and that they do understand their obligations and their responsibilities?
COMMISSIONER FINCHEM: Oh, yes, absolutely. When I say that, I say the vast majority of the players intensely get it. Some of the things we do are in reaction to the players asking us to ask them more.
Players want to do -- here is my attitude about PGA TOUR players. They will disagree. If you get ten guys, they will disagree on something that's not very important and get ten different opinions. Something that's important, they usually rally around and they get it, and they are committed to doing whatever they can do to be of assistance. That's not a problem.
Sometimes we are inefficient in stipulating how their interest in helping can be channeled. We are putting more energy into that now. But guys have been great.
Look, the reason we have been fully sponsored over these years, and the reason we have been fully sponsored through the downturn is because of the players, because of what the players do on the golf course, off the golf course, dedicated to charity, working with customers.
So what I said at the end of the year was just to reinforce that we have got a lot of challenges right now and we just need a little bit of extra effort. It's not like I had to explain to them why. It's just that I tried to put it and focus in some ways that we need these three or four things to happen extra this year. If I didn't do that, we still would be in good shape.

Q. What are some channels that you look at where they can channel the extra effort?
COMMISSIONER FINCHEM: It's a lot of little things. We have a lot of players that play the PGA TOUR. We have over 200 exempt players, and we have another couple hundred that play some. They play in Pro-Ams, they engage with fans, they are asked by you guys and other members of the media to spend time with them. And as you know, the vast majority of them are cooperative, affable and upbeat, but we have some that are not so.
These guys operate under a huge stress level. They have families, they are on the road all the time, and they are trying to win. It's just blocking and tackling. We want them to spend more time with you; and we want them to spend more time with television; and we want them to spend more time with sponsors; and we want them to make sure they are delivering a good experience in the Pro-Ams. We want them to push their schedule a little bit if they can, play an extra event here or there. These are not new concepts or things.
In the execution of things like sponsors, at the tournament level, it's more than just the title sponsor. It's the next 15 or 20 companies that are really fueling the ability of that tournament to raise money for charity, which, in turn, if the tournament is effective in charitable giving, the community embraces it more and more tickets are sold and more interest and the media has more time and energy and stories for the tournament. And so it all works in concert, and it's worked well for us. I think it's going to continue to work well. I'm very positive about the future.

Q. With just one more year left on the contract here, what are your thoughts on the future of this event, specifically, at Kapalua?
COMMISSIONER FINCHEM: Well, we have one more year on the contract with Kapalua, and we are looking at some options in terms of what is the best future for this tournament. I wouldn't want to speculate on anything at this point.
We have done this before. We have done it a couple of times. It's not the only place we do it. I think the way we like to believe you will get better is to constantly challenge what you are doing and ask the question, Can you do it better? We do that in concert with tournament organizations and sponsors, and that's just another example of doing that. It doesn't necessarily mean we will do anything particularly different, but we are looking at some other options.

Q. Are there some thoughts about changing the format of qualifying for this event, and/or, is there any thought of changing it on the calendar at all?
COMMISSIONER FINCHEM: There's no immediate thought of changing it on the calendar. The format is something that's discussed every couple of years. It's just a usual review. I wouldn't want to speculate that we would necessarily do anything different at this time. It's fairly early in the process.

Q. I know it's going to be on the GOLF CHANNEL sometime tonight, but you talked about the suspension of John Daly. I was wondering if you could enlighten us on that process and why you did that. And secondly, why the TOUR, if not specifically, talks about fines and suspensions, why generally they don't talk about it, and in regards to saying exactly how many fines were handed out last year and how many dollars were involved.
COMMISSIONER FINCHEM: Well, to your first question, I really didn't talk about -- I answered a question which is -- the question was, "When somebody like John Daly announced that you had suspended him, do you have any comment?"
I said, "No, not really." (Laughter). We don't comment -- and I'll get to your second question in a minute, as to why.
But if a player comments, if a player says, "I was fined $50," and he was fined $10,000, we might correct the record. But that's the extent of our commentary. That's up to the player, whether the player wants to keep it confidential or not.
So that was my response to the John Daly situation. I did say that I am not clarifying or changing his commentary on his suspension, which by definition means that he is generally correct in what he said.
Now, why don't we talk about it or give out the details. One, we don't feel like people really care that much. We don't get emails from fans saying, Why don't you tell us. So we don't think there's this hunger for that information.
Two, candidly, we don't have that much of it, and we don't want to remind people about it. I'm just being straightforward. If somebody -- and remember now, in our sport, a bad thing is a bad word; it's not getting indicted usually. It's a bad word. But we don't want to remind people by saying, we fined such-and-such a player $5,000 for saying a bad word. It's just reminding them that he said a bad word.
In most cases, people don't know he said a bad word; somebody was standing at the ropes, a marshal or a fan who brought it to our attention, for a fellow competitor, and the player got fined. So usually it's a very small amount of people that know about the kind of attractions that we get, and we see no reason to publicize it.
If we had a problem of any magnitude, if we had a conduct problem, if we were faced with any significant issues where a player is not showing integrity or respect for the game, we might have a very different attitude. I mean, I can understand in the NBA that if a guy jumps into the stands and gets into a fistfight, if I the Commissioner, I would pretty much feel like I had to tell the public about that, because there's a demand to know. We don't have those kind of situations.
So for those reasons, we felt that it's prudent just to follow the policy that we had.

Q. But John Daly, just to use a name, obviously whatever we all think of him is one of the better-known and more popular players. He disappears from view, he lost exemptions, etc., etc., and people say, Where is John Daly, and why, and nobody knows. All of a sudden he pops up and says, "I've been suspended."
COMMISSIONER FINCHEM: Well, I didn't hear anybody actually say, "Where is John Daly?" And I know exactly what he's been doing every week (laughter). No one is calling our office saying, "Where is John Daly? How come he's playing in Australia? And by the way, what was that all about down there?" We didn't get those calls. But in this situation, he obviously decided that he said so; that his fans were going to wonder where he was, and that's his prerogative to do that.

Q. On the John Daly thing, assuming from what you're saying is that you did suspend him; in any way, do you weigh not the actions of the player, but how it may impact the tournaments?
COMMISSIONER FINCHEM: In what sense?

Q. Well, if Art is right, and John Daly is a draw, and that he can't be invited to an event, and the tournament will somehow suffer by being able to invite him.
COMMISSIONER FINCHEM: No, we don't. Suspensions are used for a specific purpose, and they are only used when it's necessary to use them, in our view. Our job is to maintain the image of the sport. That's our No. 1 asset. It's more important than any player and any tournament, and we are going to take every step that we have to, to try our very, very best to avoid it being diluted in any fashion.
If that means suspension in some cases, so be it. But we have to take steps to make sure that the reason we don't have to announce that is because we don't have a problem and we take steps to be prudent to make sure we don't get a problem.

Q. So in this particular case, would it be punitive or somewhat corrective? Six months off this TOUR --
COMMISSIONER FINCHEM: I'm not going to comment on the details. We could use suspensions or all kind of reasons as it relates to a player's conduct. Where you draw the line between punitive and corrective would be a subjective evaluation anyway.

Q. But do you expect him to come back better than he was?
COMMISSIONER FINCHEM: I'm not going to comment on my expectations.

Q. How important is this tournament and it's link to the success of the Sony, and is it important for the TOUR to start here in Hawaii?
COMMISSIONER FINCHEM: Well, I don't really know the answer to the first question. I think it is helpful to have them together in Hawaii. We found it to be a good situation over the years. It didn't used to be that way when the Sony was sponsored by United for a good number of years. It was kind of by itself over here in the middle of the West Coast and didn't start the season. That was a while back.
It's hard for me to say what that would be like today. Starting the season here is really a testament to weather patterns, as much as anything. We like to take advantage of a good time of the year from a television standpoint on the Mainland. But to do that at this time of year, there are only so many markets we can play.
We used to play this tournament in San Diego and we had weather trouble a lot. We found the weather over here better than San Diego at this time of year. That's not to say that we couldn't go a different direction maybe, but so far it seems to be working.

Q. Even though you've right now lost, I think one tournament out of the schedule. I believe I read or heard somewhere that prize money is still up from last year.
COMMISSIONER FINCHEM: Well, in our current schedule where we took a week off before THE TOUR Championship, so we reduced the Fall Series by an event to do that. We are not done with the fall yet, but that's where it is now.
So I do think that that included, there is a slight up-tick in prize money, but it's not significant. It's flattened a lot. And we said three or four years ago, it was going to flatten. We projected that we were not going to see the kind of increases during this little series in the year than we had in the last five or six years, but we had some increases.

Q. But still, it's a good amount of money to play for?
COMMISSIONER FINCHEM: Yes, I think it's very healthy. And we are very pleased with the ability to do that. Now we have to make sure that we deliver on the maturity this year and all that stuff.

Q. I don't know if this is asking for too much detail on fines and suspensions, but some organizations take the funds from fines and donate them to charity; does the TOUR do that?
COMMISSIONER FINCHEM: Yes.

Q. Do you think that The European Tour's introduction of The Race to Dubai is going to impact the strength of your fields or the number of times your marquis players play?
COMMISSIONER FINCHEM: Not in and of itself, no. What I mean by that is that if a player wants to qualify to play in Dubai, he can do so without it having much significant effect whatsoever on a typical schedule, if he wants to.
Now, he can go a different direction and it could have an effect, but there's a way that given the configuration of the European Tour, the events in Asia after late in the fall, before Dubai, and the historical position of The Barclays the week before the Open, a player can really get to the number without really having much of an impact.
The majors and World Golf Championships you need to play, and Dubai counts, itself.
They have this on atypical year because it's a 13-month season. If they go back to 11, it's negligible. It's actually negligible. Now, if you play some in Asia, a couple of players played, so they already played a couple before they even got to the first of the year. So it's really not an impact.
And as I've said before, I think the Dubai event, first of all, I think it's important to recognize what Dubai is. It's a big event for the European Tour. It's an event that has a prize level which is slightly ahead of THE PLAYERS Championship, but it's one week.
But it serves a purpose of providing some more glue to that TOUR; and therefore, we are very supportive of it, because we think it's important and good for golf that The European Tour be as strong as possible. So we are supportive.
And we are supportive of our players who want to go play. We would just like to see them configure their schedule in a way that it doesn't detract from field qualities, and we think in most cases that won't be the case.
DOUG MILNE: Thank you very much for your time, Commissioner, we appreciate it.

End of FastScripts

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